Central Bank moves to allay fears over tracker mortgages

Code of conduct intended to help avoid home repossessions, bank's consumer chief insists

The Central Bank’s director of consumer protection, Bernard Sheridan (at front), has expressed concern that restrictions limiting to three per month the number of unsolicited contacts a bank can make with a borrower in arrears  were hampering the speed at which many problem loans were being resolved.  Photograph: Gareth Chaney/Collins

The Central Bank’s director of consumer protection, Bernard Sheridan (at front), has expressed concern that restrictions limiting to three per month the number of unsolicited contacts a bank can make with a borrower in arrears were hampering the speed at which many problem loans were being resolved. Photograph: Gareth Chaney/Collins

Fri, Apr 12, 2013, 13:33

The Central Bank has insisted proposals in a new code of conduct which could permit banks to remove tracker mortgages from borrowers in serious arrears are intended to help people avoid repossession.

This morning, the bank's director of consumer protection Bernard Sheridan said protections within the current code were “working well”. However, he expressed concern that restrictions limiting the number of unsolicited contacts a bank can make with a borrower in arrears to three each month were hampering the speed at which many problem loans were being resolved.

“That contact needs to be made to find out what is the cause of the arrears and what can be done to resolve the arrears,” Mr Sheridan told RTE Radio.

He denied that allowing banks to contact distressed borrowers more frequently would lead to harassment, and said a number of inspections of bank practices by the Central Bank had not “found behaviour which would constitute harassment”.

He said proposals which would allow banks to move some borrowers off trackers would only apply to people who were in serious danger of having their homes repossessed.

He said there was “no doubt” tracker mortgages had value to borrowers in arrears, but suggested it could be possible to “convert the value of the trackers into writing down debt”, thus transferring unsustainable mortgages into more affordable ones.

When asked how consumers could know what deals banks were doing when many lenders insisted on non-disclosure agreements, he said the Central Bank was investigating whether it could “bring greater transparency to what is being offered”.

Sign In

Forgot Password?

Sign Up

The name that will appear beside your comments.

Have an account? Sign In

Forgot Password?

Please enter your email address so we can send you a link to reset your password.

Sign In or Sign Up

Thank you

You should receive instructions for resetting your password. When you have reset your password, you can Sign In.

Hello, .

Please choose a screen name. This name will appear beside any comments you post. Your screen name should follow the standards set out in our community standards.

Thank you for registering. Please check your email to verify your account.

We reserve the right to remove any content at any time from this Community, including without limitation if it violates the Community Standards. We ask that you report content that you in good faith believe violates the above rules by clicking the Flag link next to the offending comment or by filling out this form. New comments are only accepted for 3 days from the date of publication.